Flexible monthly business insurance
Freelancing is a great way to take full control of your own career. There are many people who would jump at the chance to become their own boss, take on the clients and projects that interest them the most, and work whenever and wherever they want.
If you’re one of these people, and wondering how to become a freelancer, then you’ve come to the right place. Our ultimate guide has all the answers and advice you need to start your freelance journey.
Jump to where you want to go:
- Is freelancing right for me?
- Pros of freelancing
- Disadvantages of freelancing
- What can you do as a freelancer?
- How much can you earn as a freelancer?
- How do I start freelancing?
- The best websites for freelance roles
- How to stand out as a freelancer
- Mistakes to avoid while freelancing
Is freelancing right for me?
This is an important question to find an honest answer to. Whatever your current employment situation, it’s worth making a list of the pros and cons of freelance life as they apply to you. And while everyone’s priorities will differ, we’ve included some of the key points to start you off.
Pros of freelancing
Choice of clients
For many, the appeal of freelancing is the ability to choose exactly which clients you work with. There’s no obligation to work on projects you find boring, keeping you motivated to deliver great work on projects you really care about.
On becoming a freelancer, you gain complete control of your workload. That means having the flexibility to do as much work as suits you, whenever or wherever you want. If you’re a night owl that doesn’t want to work from 9-to-5, you can instead choose the hours that work for you.
Freelancers are independent spirits. Much of the time you will be working alone, without the distractions present in a normal office environment. That can grant you more focus and increase your productivity.
Setting your value
Setting your own rates means you can be paid the value of your skills. You will know best what you really deserve for each job you do. Being in control of the money you are paid means you can choose the income you earn. And the more projects you take on, the higher that income can grow.
Disadvantages of freelancing
Irregular cash flow
One of the worst drawbacks of freelance work is that you lose guaranteed regular income. Freelancers need to constantly be thinking about the next job, generating a healthy pipeline of future work. You should also be putting processes in place that ensure the clients you do have pay you on time. Otherwise, cash flow can become a problem. There are plenty of ways to make sure this doesn’t happen, which you can read about in our guide to managing cash flow as a freelancer.
Irregular income can create feelings of insecurity, as every freelancer will go through a lean spell once in a while. Not knowing where the next pay day will come from can increase the pressure when it comes to financial commitments, and exacerbate the next con on our list.
If you’re a sociable person, freelance life can become pretty lonely. As you will likely be working on your own, you won’t have an office environment in which you are able to collaborate, bounce ideas around, or simply have a natter over the coffee machine.
It’s no secret that freelance life involves plenty of admin. The moment you become your own boss, you will take on all the responsibilities required of any business. From writing contracts and chasing invoices, to making sure your finances are in order and your taxes are paid – you’ll be in charge of all the behind the scenes things that enable your business to operate.
What can you do as a freelancer?
Freelancing works for many people because of the sheer variety it offers. One month you could be completing multiple small projects for a number of clients, the next you could be focused on a massive project for just one.
What you will actually be “doing” will often depend on your sector and experience. But the beauty of freelancing is that almost every service imaginable can be outsourced to a third party. Whatever your specialist skill, you can almost certainly provide it as a freelance contractor.
If you’re still not sure which jobs are most suited to freelancing, here are some job roles that tend to be delivered by freelancers the most.
Creative services are in high demand, and businesses often use freelancers to tap into skills they don’t have in-house. Graphic designers, photographers, copywriters, videographers and audio editors can all make an excellent living by freelancing.
Freelancing is a good fit for PR consultants with excellent journalist contacts. For businesses who have news to share, but can’t afford a retained agency, a good quality freelance PR can be the difference between making a splash and a ripple in the media.
Accountants, bookkeepers, analysts and financial advisors are all highly skilled and qualified positions, which can often be fulfilled by freelancers.
How much can you earn as a freelancer?
Your freelancer salary will depend on your industry, your experience, and your ability to get the ball rolling and build a roster of clients and projects.
Building your own freelance business takes some short-term time investment. Many new freelancers will find they earn little-to-nothing over the fest few months, as they build their network and reputation. Unless they've already set themselves up with contacts and potential projects before quitting full-time work.
Regardless of industry, there’s plenty of evidence that established freelancers will be earning more than you would as a salaried employee. Real Business reports that, on average, self-employed people earn £5,000 more than the typical employed person. And that’s while working 10 hours less a week on average.
To get an accurate gauge of your earnings potential, take time to research the income of freelancers in your sector. This will help give you a grounded expectation of the money you’ll make after you take the plunge.
How do I start freelancing?
So, you’ve weighed up the pros and cons, and done the research. If freelancing seems like the right fit for you, then it’s time to get started.
1. Decide on your business structure
Are you going to be a sole trader or form a limited company? Both have their benefits and will determine things like how you do your taxes, so it's an important question to ask yourself. However, don’t be intimidated. If required, you can always change your decision at a later date.
Here's the difference:
Sole traders are the UK’s most popular type of business type for freelancers. You will run your business as an individual and HMRC will let you keep all your profits after tax. However, you will also be personally responsible for any losses the business makes. And you’ll need to keep up to date with any new government rules on running or naming your business.
Keep in mind that some businesses won't work with you unless you're a limited company, so it's worth considering if this is the case for your line of work or even asking potential clients if this is required.
Limited companies encompass millions of businesses across the UK, and operate in a different way to sole traders. These companies are kept legally separate from the people who run it (i.e. you). Generally, limited companies are more tax efficient than sole traders if you earn over a certain amount, and you will only be liable for the amount you have put into the business. However, you will have extra fiduciary responsibilities and paperwork, which will often require a qualified accountant to tackle.
Other options are also available, including social enterprises, business partnerships and overseas companies. All of these come with different structures and responsibilities, so visit the self-employment gov.uk hub for more information.
2. Register with HMRC
While freelancing offers plenty of flexibility, registering with HMRC is non-negotiable. Luckily, the self-employed legal requirements can be accessed and checked off using gov.uk. Whatever business structure you've chosen, this will be the starting point for a lot of your admin, especially when it comes to registering as self-employed.
Remember that when dealing with HMRC it's vital to keep accurate business records. These start with your income and expenses. Keeping track of these is essential, especially when you come to file your tax return.
There are different rules for record-keeping, and your responsibilities will depend on whether you’re a sole trader, partner in a business partnership or limited company (or a different type of legal structure). Think about the method you will use to record your accounting, and whether that includes sales and income, business expenses, PAYE records, VAT records, grants you’ve claimed or personal income (some of these may not apply to your business).
You can use tools ranging from a Google sheet to accounting software or tax return app. Just remember that the rules around tax returns will be change soon due to Making Tax Digital, so be sure to choose the technology that will work for you best.
3. Set your rates
When it comes to deciding how much to charge, you should aim to be competitive, but don’t undersell yourself. Remember that businesses will be looking for quality and reliability, so price yourself accordingly to deliver those key traits. You can be paid a project-fee, a day rate or an hourly rate. You should have a solid idea of what you want to be paid for all three, but remember there may well be room to negotiate as part of any contract agreement.
4. Purchase freelance insurance
Becoming a freelancer is an exciting career step. But it’s important to realise that sometimes, for reasons we can’t control, things can go wrong.
Make sure to check out our guide to what freelancers should know about insurance for a full run through of your options. But for now, let’s focus on the two key types of insurance that every freelancer should consider.
Professional indemnity insurance
Clients pay for your knowledge and expertise, but what if you make a mistake? This is what professional indemnity insurance is for. If your advice causes your client to lose money, you could face a lawsuit. And that can mean legal costs and compensation. Superscript's professional indemnity cover comes with media liability cover as standard, which means you're also covered for accidental copyright infringement.
Public liability insurance
Whether you're working from a home office, coworking space, a client's office or even out and about, public liability insurance provides protection for if you cause accidental injury or property damage to a member of the public or while you're working.
There are plenty of other cover options available, so visit our freelance insurance hub for advice on the best options for your freelance business.
5. Get a business bank account
This is by no means a legal requirement, you can use your personal bank account if you'd like. But many freelancers prefer to manage their finances by separating their personal and business expenses as it makes things like doing your taxes or spotting missing invoices much easier.
If you're unsure of which one to go for, check out our guide to the best business bank accounts.
The best websites to find freelance roles
If you’ve ticked off the above, then you’re well on your way to become a fully-fledged freelancer. The only thing left is to find your first project and start building your reputation. Luckily, there are plenty of websites to launch your freelance career.
A first port of call would be to set up accounts on Upwork, The Work Crowd and Fiverr. These freelance marketplaces will help you find projects that add some heft to your portfolio, while creating word-of-mouth buzz that will bring in more jobs down the line.
How to stand out as a freelancer
Marketing yourself as a freelancer is an important way to keep the clients rolling in. But there are three simple things you can do to stand out from the crowd.
1. Build an online portfolio
Remember that this is your shop window and needs to reflect your best work and testimonials. You could use something as simple as a service like Clippings.me. Or you can build your own snazzy website with all the bells and whistles. At the very least, however, it absolutely needs to contain your very best work and your contact details.
2. Deliver on time
Meeting deadlines and delivering work on time (or ahead of time) is absolutely vital. This is the best way you build trust with your client base, and create a reliable reputation that will be passed on through word of mouth.
Of course, things may get super busy from time to time. But if that happens it’s important to keep communicating with your clients. They’ll be much more understanding if you explain the reason for a delay ahead of time, than they will be if they have to chase you for work long after the deadline has passed.
3. Pitch new ideas
Some freelancers will take a brief and deliver it to the letter. And that’s perfectly fine. But if you really want to stand out, it pays to take a more invested role in the brief you have been given.
Asking relevant questions, doing extra research and making suggestions built off of your own experience can enhance the work you’re delivering. If you’re proactive in pitching new ideas and developing new streams of work for a client, they will come to think of you less as temporary freelance help, and more as a regular trusted partner. And that really is the sweet spot.
Mistakes to avoid while freelancing
Freelancer life is full of potential. But as we’ve discussed, it can be more insecure than salaried work. Here are some mistakes to avoid in order to keep freelancing successfully.
Don’t think within the “9-to-5”
A freelancer’s job is rarely done. Although you will be able to build more flexibility into your work, you need to take responsibility for your own marketing, pipeline, finances and administration. This all needs to be given enough time to be dealt with, meaning you won’t always be able to log off once it hits 5 o’clock.
Avoid late payments
Late payments are a major hurdle for freelance professionals, with the potential to seriously impact on their financial and personal lives. Luckily, there’s lots you can do to minimise the risk of late payments like from setting out your terms clearly in a contract before you start a job. Take a look at our handy guide to avoiding late payments for more information.
Don’t burn yourself out
With so many extra responsibilities, freelancers can lose sight of the bigger picture. Extra freedom, being your own boss, taking control of your own career. None of these things should come at the cost of your personal life, mental or physical health.
Choose a work schedule that is reasonable, achievable, and won’t leave you exhausted. Make a conscious effort to set aside enough time to recharge your batteries and do the things you enjoy.
Through a balanced life, you can grant yourself the head space to be more productive and effective when working. And that’s ultimately going to leave your clients happier and make your freelance career more successful.